On Tuesday, September 24, MAZ held a panel at our NYC office that brought together thought leaders from across the media and tech industry to discuss subscription “paywalls.” Throughout the evening’s panel, moderated by Adweek’s emerging tech reporter Patrick Kulp, MAZ CEO Paul Canetti, The New York Times’ VP of Product Eric Hellweg, Quip’s Director of Growth Mike Schanbacher and former CEO of Visto, Kerri Bianchi gave insight on the ever-evolving paywall.
As we learned from the “Death of Advertising” chat, for most publishers out there, implementing a hard paywall is not as simple as it seems. Not only are there several types, including the emerging“freemium” subscription, media companies also need to learn how and where to incorporate today’s wildly popular direct-to-consumer business model.
Below, we discuss the expert panel’s tips on how digital brands can utilize a “paywall” to diversify revenue streams without risking alienating existing their audience.
Large and historic publications typically have the resources, such as cash flow and trusted name recognition, to draw on their audience’s trust and investment in them.
Take for example trade publications (like Digiday) and Conde Nast’s current transition of putting all its magazines behind a paywall by the end of the year. Readers already accustomed to receiving their favorite magazines in print will have no trouble transitioning to Conde’s online subscriptions, while also attracting those willing to pay for its well-regarded digital content.
Small and mid-sized publishers can leverage niche content to draw readers who can’t find its offerings elsewhere.
For example, investigative tech publication The Information, which charges a whopping $400/year for exclusive in-depth stories, has attracted the industry it covers to invest in its reporters. The premium subscription rate far exceeds the average revenue that such a niche publication has a chance at generating from ads alone. For example, the site would need thousands of page views per month to bring in a similar ad revenue rate. Some Silicon Valley’s top power players have been praising The Information’s coverage since its launch in 2013, and according to the company, “Ten out of 11 of the founders of the most highly valued private tech companies subscribe.”
Specific content can pay off.
Besides implementing hard paywalls, publishers that specialize in niche content can also convince complementary advertisers of choosing theirs over a more broad audience. “The idea of looking for quality audiences are what many marketers are looking for, and that’s a big part of it,” explained former CEO of Visto Kerri Biachni during MAZ’s Paywall panel. She also noted to the data science that goes into which type of consumer to target and which will stick with free content.
Take a page out of academic publications.
Selling data-driven content “for parts” is one way to add a non-traditional revenue stream. For example, the Harvard Business Review “repackages” their highest quality stories with multimedia using various formats slideshows, presentations, infographics, etc.
Consider a freemium model in the vain of Spotify or Hulu.
Not every article needs to be blocked for a paywall to bring in revenue. Publications can determine what content to put behind a paywall and which it’s willing to give away for “free” (ad-supported) to the public in order to keep audiences coming back. Take streaming service Hulu for example, which has perfected the multi-tier subscription model to suit all its customers, including its popular $5.99/month ad-supported plan.
Similarly, music streaming giant Spotify also runs ads and limits premium features for its “free” account users, thus encouraging them to pay up for uninterrupted service. Depending on the type of content being presented and your audience’s data-measured priorities, one of the aforementioned hybrid models may offer a better ad revenue route than a conventional paywall.
When it comes to digital paywalls, there is no one-size-fits-all solution, as our panel of experts outlined. For publishers looking to take the subscription plunge, following a few of the above tips could ensure a sustainable, reader-friendly model.